£20m deal secured for managed closure of Kellingley Colliery

UK COAL has secured a £20m deal to carry out a managed closure of Kellingley Colliery by the end of next year with the gradual loss of 600 jobs.

The deal, which includes a £4m government loan along with cash from private investors, will enable the company to wind down operations at Kellingley near Pontefract and at Thorseby in Nottinghamshire.

Last month, the National Union of Mineworkers shelved an employee buyout plan of Kellingley amid claims that UK Coal had made the plan unviable.

Andrew Mackintosh, communications director at UK Coal, said: “This is a day of very mixed emotions but it was critical that we managed to avoid insolvency and the immediate collapse of the business.

“What this deal means is that we can have at least survive until the end of next year.

“ We are very grateful for the support we have been given and this deal does not prevent fresh investment in the company, even at this late stage.

“We would like to thank the government, our people, customers, suppliers and other interested parties for all of their support and will work with them to ensure a smooth transition in the coming months.”

Keith Hartshorne, NUM delegate at Kellingley, said the next batch of redundancies were scheduled for April next year.

Mr Hartshorne said: “It is very frustrating and there is a lot of anger and disappointment at the pit.

“But the deal doesn’t really mean anything to us because we have been going through this since April and it’s just confirmed what we already knew.

“The next batch of redundancies, which is for about half of the workforce, will come out in April and they will be given 12 weeks notice. Then the other half will leave in December.”

Matthew Hancock, business, enterprise and energy Minister said: “We have worked closely with the company for months during this difficult time following a sharp fall in global coal prices. Our commercial loan will support a managed closure that is in the best interests of the taxpayer and employees. The only alternative was immediate insolvency.

“We have also been meticulous in designing the support offered to 2015 so that it does not compromise the possibility of further investment in the company in the future.

“I will continue to work with the company and unions and am personally committed to doing all we reasonably can to support the remaining deep coal pits, subject to getting value for money for taxpayers.”